SM Entertainment to buy controlling stake in Keyeast for $47mn

SM Entertainment to buy controlling stake in Keyeast for $47mn

South Korea’s major entertainment agency SM Entertainment Co. will acquire a 25.12 percent stake in its smaller rival Keyeast owned by actor Bae Yong-joon for 50 billion won ($47 million), the company announced in a disclosure Wednesday.

Bae, the largest shareholder of Keyeast and star of the mega hit Korean drama Winter Sonata in early 2000s, will sell his entire 19,455,071 shares to SM in return for SM’s new shares worth 35 billion won and 15 billion won in cash. As Bae will sell his stakes at 2,570 won apiece, he is expected to take profit of more than 40 billion won from the sale. With his 4.2 percent stake in SM following the deal, Bae will also become the third largest shareholder in SM.

Bae Yong-joon

SM said it will actively pursue digital entertainment and platform business after the acquisition.

The Kosdaq-listed Keyeast is engaged in various culture and entertainment businesses with many top celebrities, mostly actors and actresses, in the country including Kim Soo-hyun, Han Ye-seul, Park Seo-joon and Woo Do-hwan. It will soon hold a shareholders’ meeting to appoint a director and auditor picked by SM.

SM Entertainment shares closed Wednesday down 0.24 percent at 41,600 won, and those of Keyeast down 6.07 percent at 2,710 won.